UNITED STATES GOVERNMENT PRINTING OFFICE
BOARD OF CONTRACT APPEALS

BRENNER PRINTING COMPANY
PROGRAM 1701-M, JACKET 772-742 and
PROGRAM 1736-S , PURCHASE ORDER K-2954
Decision dated August 25, 1980

PANEL 3-80
JAY E. EISEN, Chairman
ROBERT W. ARMENTROUT, Member
RAYMOND J. GARVEY, Member

I. INTRODUCTION

This matter was brought before the Contract Appeals Board as a
result of appeals dated May 23, 1979 and May 29, 1979, relative
to Program 1701-M, Jacket 772-742 and Program 1736-S, Purchase
Order K-2954, respectively, by Brenner Printing Company, 14
Burwood Lane, San Antonio, Texas, hereinafter designated as the
Contractor or Appellant.  The contractor appealed termination of
contracts it had with the Government Printing Office for the
printing of 30,000 pamphlets, and a monthly newspaper for the
Department of the Army and Air Force, respectively under Purchase
Order K-2450, Program 1701-M, Print Order 38, Jacket No. 772-742
and Program 1736-S, Purchase Order K-2954, Jacket 671-024.  The
two timely appeals are consolidated.  The background for the two
contracts involved in the two contracts will be outlined below.

II. PROCEDURE ON APPEALS

Site of Hearing

Government Printing Office Instruction 110-10, titled Board of
Contract Rules of Practice and Procedures provides that hearings
are  held at the U.S. Government Printing Office, Washington, D
C, except that upon request reasonably made and upon good cause
shown, the Special Projects Officer in his discretion may set the
hearing at  another location. The Board of Contract Appeals by
letter dated May 15, 1980, notified the contractor that a review
of the file failed to  reflect an election to be heard and submit
evidence in one of the  following procedures:
(1) Upon submission of the written record only (Par. 12, GPO
Instruction 110.10) or
(2) At an informal hearing (Par. 13, GPO Instruction 110.10).

The Board, anticipating the contractor's election to be held
based on correspondence in the file, scheduled a hearing to
convene in Washington, D C, on June 10, 1980.  The contractor
responded by letter dated May 30, 1980, wherein he stated inter
alia that he was financially unable to attend, but would be
willing to attend in person in the event that the hearing could
be held within a day's drive of San
Antonio.  The contractor's place of business is located in San
Antonio, Texas.  The Board of Contract Appeals responded by
letter dated June 17, 1980, to the effect that good cause was not
shown by the contractor as to his inability to attend the hearing
because of financial reasons and that the Board is rescheduling
the informal hearing in Washington, DC, to convene on July 10,
1980.  The contractor responded by letter dated June 26, 1980,
that because of lack of funds will not be able to attend on July
10, 1980.  The contractor did not elect to submit its appeal on
the record only pursuant to Paragraph 12, GPO Instruction 110.10.

The Board of Contract Appeals informally convened on July 7,
1980, and arrived at the conclusion that the appellant has not
supported its position by any compelling evidence of financial
instability to warrant the hearing to be held in Texas.  On July
7, 1980, this matter was discussed with the successor to the
Special Projects Officer, the Assistant Public Printer
(Planning), who concurred that the contractor has not shown good
cause to warrant convening the hearing in Texas.  John H. Moon &
Sons, IBCA, 70-1 BCA  8280 (1970).

The appellant was advised by letter, July 15, 1980, that his
unexcused absence from the hearing leaves the Board no recourse
but to decide the case on the written record as submitted by both
parties.  In view of appellant's failure to appear at the hearing
in person or by an attorney and thus derive the maximum benefit
from being confronted by Government witnesses for purposes of
cross-examination, we feel that no good purpose would be served
by scheduling a hearing before the Board.  We realize that the
Government will be unable to present its case through live
testimony of witnesses, just as the appellant could not examine
Government witnesses, but we will examine that fact in
determining the weight to be given the evidence on each side.
Jack L. Sailors Company, ASBCA, 58-1 BCA  1696 (1958).

III. FINDINGS OF FACT

A. Appeal of Brenner Printing Co., Program 1701-M, Jacket
772-742,, Print Order 38.

The appeal was taken pursuant to Article 29 (disputes clause) of
U.S. Government Printing Office Contract Terms No. 1, approved
July 1, 1943, revised July 15, 1970, which was integrated as part
of the Contract, Jacket 772-742.  On July 3, 1978, a Printing and
Binding Requisition was received by the Regional Printing
Procurement Office, Dallas, Texas, as (hereafter Dallas RPPO)
from the Department of the Army, Fort Sill, Oklahoma, for the
procurement of 30,000 pamphlets titled, "Field Artillery The
Career with a Future," Print Order 38, Program 1701-M, 8/1/77 to
7/31/78 was offered to the Brenner Printing Company, San Antonio,
Texas.  Their quotation
was accepted by the Government on July 7, 1978, and Purchase
Order K-2450 was issued to the appellant on July 12, 1978.  The
pamphlet was designed for a trim size 7 7/8" X 10 1/4", black ink
on 100 pound vellum stock, a finished cover and 3 holes drilled
for insertion in a binder.  The estimated cost of the contract
was $7,908.90.  The Print Order indicated a shipping date of
August 11, 1978, with full delivery to the Transportation
Officer, Fort Sill, Oklahoma.  (AF. Ex. 6,8).

A change order was issued to the appellant by the Procurement
Officer, DRPPO on August 14, 1978, to the effect that the
contractor was authorized to make and furnish one set of proofs
(AF., Ex. 11).  The proofs, upon being forwarded to Fort Sill for
inspection revealed that the pages had been improperly imposed,
causing the margins to be incorrect.  An additional set of proofs
was requested by Fort Sill, which was provided by the contractor,
for the purpose of altering by the Department and then to be
returned to the contractor to show the correct imposition of the
pages.  The altered set of proofs showing correct imposition was
received on September 7, 1978, in Dallas RPPO and forwarded to
the contractor with a letter of transmittal dated September 7,
1989, providing for the notation, "approved to print with
corrections as marked."  (AF. Ex. 17).

The appellant printed the pamphlets and the Department of the
Army acknowledged delivery at Fort Sill, Oklahoma, on November 2,
1978.  The Director, AFPP, Fort Sill, Oklahoma, in a letter to
Dallas RPPO, dated November 7, 1978, indicated that the job
should be rejected because of the very poor quality printing and
binding provided by the contractor.  Seven samples, picked at
random were submitted to substantiate the complaint.  The reasons
given for their rejection were:

   1) Page imposition was inconsistent.
   2) Pages 54 and 55 positioned too far apart.
   3) Poor binding.

The Department of the Army requested that the job be reprinted
correctly and delivered to Fort Sill by November 17, 1978.  The
contractor was advised that the Department of the Army consider
the job unusable.  (AF. Ex. 18,19).

The appellant was notified by a telecommunication on February 22,
1979, by Mr. Charles C. Booth, Contracting Officer's
representative as confirmed by letter dated February 23, 1979,
inviting him to witness an inspection of the pamphlets procured
from his firm (Jacket 772-742, Program 1701-M, Print Order 38) at
Fort Sill, Oklahoma.  Mr. Emery Brenner, the contractor, declined
to appear and witness the inspection.  (AF. Ex. 20, 21).

A quality assurance inspection at Fort Sill, Oklahoma, was
performed by Dallas RPPO on February 26, 1979, of the entire
shipment of the United States Army Field Artillery pamphlets.
Samples were taken and the inspection was conducted in accordance
with a Multiple Sampling Plan of the shipment of 279 cartons with
about 101 pamphlets per carton on 7 skids. The following
procedure was used for a random sampling of the 30,411 pamphlets:

1. The skids were numbered 1-7.
2. One carton was randomly selected from each skid and labeled
"A".
3. Five pamphlets were randomly selected from each carton and
labeled 1-5.
4. This procedure was repeated throughout four samplings.  The
cartons from each sampling were set aside to insure that
different cartons would be selected for each sampling.  A
pamphlet labeled
1-A-5 would be the 5th pamphlet of the first sampling from a
carton selected from skid No. 1.

Inspection of the shipment in accordance with the above sampling
procedure revealed that:

1. A background tone screen approximately 7 1/3" X 11/16" was
omitted from page 21.
2. Extraneous marks, i.e., oil spots, scum, etc., were prevalent
throughout; particularly register targets printed on pages 40 and
47.
3. The trim is inconsistent throughout.  The samples varied as
much as 1/4" in width and some image loss occurs on the outside
trim.
4. The margins are inconsistent throughout and are not maintained
at 1/2" from the outside trim as specified.
5. The drilling is inconsistent throughout with some of the holes
being drilled in the fold line.

On March 1, 1979, the contracting officer determined that the
defects rendered the pamphlets unacceptable and that the order be
rejected in its entirety.  The contracting officer requested that
the appellant reprint the entire order at no additional expense
to the Government and ship no later than April 24, 1979, after
receipt of notice.  (AF., Exhibits 22-36, 37, 39).

Prior to the final termination notice of April 19, 1979, the
contractor had written to the Dallas, RPPO by letter dated April
10, 1979, wherein he stated inter alia, that shipment of 30,411
books to Fort Sill, Oklahoma, in 279 cartons was made on October
24, 1978, and that on January 22, 1979, he received full payment
from GPO in the amount of $7,345.85.  He contended that there was
a sufficient time interval between October 24, 1979, and January
22, 1979, to allow for whatever inspection and rejection that
might have been found appropriate.  In addition, it was asserted
that pursuant to his request of the rejected books, Dallas RPPO
shipped to his plant on or about March 28, 1979, 3,024 books and
that appellant's individual inspection as compared with a reprint
sample book revealed 269 books that contained registration marks
or other imperfections as stated in the contracting officer's
letter of March 1, 1979.  (AF. 40, 41).

The contracting officer issued a final termination notice on
April 19, 1979, upon appellant's refusal to reprint the order.
This notice, after advising the appellant that the default was
taken in accordance with Article 18, GPO Contract Terms No. 1,
states further:

"You are also advised that the same or similar items terminated,
may be procured against your firm's account, on such terms and in
such manner as the Contracting Officer deems appropriate.  In
that event, your firm shall be held liable to the Government for
any excess costs.  The Government reserves all rights and
remedies provided by law and under the contract, in addition to
charging to excess costs."

The contractor disputed the decision of the Contracting Officer
and the appeal dated May 23, 1979, followed.  Reprocurement was
effected under Jacket 673-381, Purchase Order K-7587, on April
18, 1979, with the award issued in response to a bid by telephone
to P.M. Press, Inc., 1850 Empire Central, Dallas, Texas, at a
cost of $17,590.

B. Appeal of Brenner Printing Co., Jacket No. 671-024, Program
1736-S, Print Order No. 12.

This appeal results from a timely appeal filed by Brenner
Printing Co., San Antonio, Texas.  The appeal was taken pursuant
to Article 29, (Disputes clause) of U.S. Government Printing
Office Contract Terms No. 1, approved July 1, 1943, revised July
15, 1970, which was integrated as part of the original contract.
The decision of the U.S. Government Printing Office Board of
Contract Appeals
(the Board) is rendered in accordance with the procedures
provided in Government Printing Office (GPO) Instruction 110-10,
dated June 6, 1979.

FINDING OF FACT

Program 1736-S is a term contract beginning July 1, 1978 and
ending June 30, 1979, for the production of a newspaper type
publication, titled "The Air Force Recruiter" for the Air Force
Recruiting Service, Randolph AFB, Texas.  The newspaper was
scheduled to be published monthly (12 issues) with approximately
4,500 copies per issue with manuscript copy furnished by the
Government.  (Af. Ex. 15).

Pursuant to Brenner Printing Co.'s bid dated May 24, 1978, the
contract was awarded by Dallas Regional Printing Procurement
Office (GPO) to appellant with the issue of Purchase Order K-2954
on July 1, 1978, at an estimated cost of $21,877.50 (AF. Ex. 17,
20).  By letter. dated April 6, 1979, the contractor notified the
contracting officer that he would not perform Print Order 12
unless payment was made by GPO for prior monthly publications of
the newspaper (AF. Ex. 21).  On May 3, 1979, representatives of
the Air Force Recruiting Services were informed by the contractor
that Print Order No. 12 (April issue) would not be printed until
he received payment for Print Orders No. 9 and 11.  The Dallas
Regional Printing Procurement Office (GPO) informed the
contractor that his refusal to proceed with Print Order 12 could
place the appellant in jeopardy of termination of the contract by
default.  The Government's refusal to pay contractor for
performance in the production of two earlier monthly issues of
the newspaper was due to a set-off procedure by GPO to cover
excess costs as a result of the earlier default action taken
against appellant under Program 1701-M, Jacket 772-742, Print
Order 38 (U.S. Army Field Artillery Pamphlet).  The Contracting
Officer issued a final default termination notice dated May 4,
1979 (AF. Ex. 27).  The notice, after advising the appellant that
the default was taken in accordance with Article 18 of the GPO
Contract Terms No. 1, states further:

"The Government may procure upon such terms and in such manner as
the Contracting Officer may deem appropriate, supplies and
services similar to those so terminated, and your firm shall be
liable to the Government for excess costs for such similar
supplies."

The appellant filed its notice of appeal, dated May 29, 1979,
contending inter alia that the set-off procedure followed by the
Government to satisfy an obligation claimed by the Government
under another contract, Jacket 772-742, was erroneous and
unreasonable.

(Af. Ex. 35).  The balance of the print orders remaining on
Program 1736-S, namely Print Orders 12, 13, and 14 were
reprocured.  The excess costs resulting from the termination and
reprocurement procedures amounts to a total of $540.47.

IV. DISCUSSION

Neither the appellant nor the contracting officer has been
represented by counsel during this proceeding.  As a result, the
Board has had to rely solely upon its own judgment in determining
the factual and legal issues which were presented in the written
submissions contained in the appeal file.  No oral hearing was
held before the Board and no other evidence, except what is
contained in the appeal file, was relied on in arriving at our
decision.

A. Was Print Order 38, Jacket 772-742 properly within the scope
and requirements of the specifications, Program 1701-M

In its notice of appeal, and other correspondence including its
letter of May 30, 1980, appellant raised certain points that it
wished the Board to take into consideration.  These points in
summary, are as follows:

1. That the contractor had offered to correct the defects found
in the pamphlets which was rejected by the Government; the
Government's request for reprinting the entire order at no cost
to the Government was unreasonable.

2. Since the appellant received full payment in the amount of
$7,345.85 on January 22, 1979, three months after the date of
delivery, the Government is estopped because of  the delay
involved from rejecting the order in its entirety.

3. The background tone screen omitted from page 21 of the
publication constitutes a minor deviation from the specification
requirements and should not be a ground for rejection of the
entire order.

4. The appellants inspection of 3,024 pamphlets received by  him
revealed that only 269 pamphlets contained imperfections, aside
from the omission of the tone screens on page 21 and was not
sufficient grounds for rejecting the entire shipment.

The specifications for the printing of books and pamphlets under
workmanship require that:

"All workmanship in connection with the article or product
manufactured under these specifications must be first class in
every respect.  All operations required such as imposition, press
make ready, press running, and binding must be performed with
care to insure that (1) the printing on the article or product
delivered will be good, clear, and sharp with full and uniform
ink coverage . . . ."

The specifications provide under "Certificate of Conformance,
Terms and Conditions," the following:

"1. Payment of any invoice for which a completed certificate of
conformance has been submitted shall not be needed to be final
acceptance by the Government."

. . .

"3. The material shipped shall be subject to inspection and
acceptance by the Government at the destination(s) within a
reasonable time after delivery to determine compliance with the
specifications. . . ."

Under Attachment B Payments; the contract under Program 1701-M
provides the following:

"Warranty
(a) Notwithstanding inspection and acceptance by the Government,
acceptance of the Government implied in law, payment, or any
provision of this contract regarding the conclusiveness thereof,
the contractor warrants that:
 (i) All supplies furnished under this contract are free from
 defect in material and workmanship and conform to the
 specifications and all other requirements of  this contract; and
 (ii) . . .
(b) The contracting officer shall give written notice of any
breach of the warranties in paragraph (a) within 180 days from
the date of the check tendered as
payment as set forth in (2) above.  Such notice shall specify the
non-conformities and the corrective action (if any) required of
the contractor."

Our review of the facts lead us to conclude that there really is
no dispute between the parties regarding certain imperfections in
the pamphlets.  The appellant admits that the background tone
screen omitted on page 21 of the book is lacking, but says such
deficiency is a minor deviation.  The contractor also admits that
based on his own inspection, 269 pamphlets out of 3,024 books
received by him, contained imperfections, aside from the omission
of the tone screens.  The Government inspection of the print
order of about 36,411 books at Fort Sill, Oklahoma, was based on
a multiple sampling plan of inspecting five pamphlets from each
carton.  The shipment consisted of 279 cartons and the Government
thus does not warrant that an inspection of each book took place.
However, the contracting officer conducted a systematic
inspection procedure to do what is necessary and reasonable to
assure the quality level of the books called for by the contract.
Based on the inspection, the quality of a reasonable percentage
of the books were found wanting and the Government had valid
reasons for rejection.  In addition to the tone screen omitted
from page 21, other major defects noted from the inspection
consisted of register targets printed on pages 40 and 47, poor
trim, holes drilled on the fold line and other minor defects were
present such as inconsistent margins and trim without information
loss.  Based on the evidence, it is our opinion that the
pamphlets in Print Order 38 did not conform to the
specifications.  The Government has a right to insist upon strict
compliance of supplies with contract specifications.  Farwell Co
v. U.S., 137 Ct. Cl. 831 (1957).

There is no indication that appellant was prejudiced in any way
or subjected to any additional expense by reason of the
Government's delay in making the on-site inspections at Fort
Sill, to which the contractor was invited to attend, 3 months
after payment.  Furthermore, the Government was not dilatory.  It
had a contract right to conduct an inspection within a reasonable
time after delivery.  Under the terms of the warranty provisions
of the contract, the Government had a right to make an inspection
and give written notice of any defects of material and
workmanship within 180 days from the date of the check tendered
as payment.

Article 13 of GPO Contract Terms No. 1 entitled "Inspection and
Tests" provides for the rejection of material which is not in
conformity with the specifications.  With exception which are not
relevant here, see Radiation Technology, Inc. v. United States,
177 Ct. Cl. 227, 366 F.2d 1003 (1966), the Government may require
strict compliance with its contract specifications or may reject
the offered product and default the contractor.  See American
Electric Contracting Corp. v. United States, 579 F.2d 602, 608
(Ct. Cl., 1978) Branz Mechanical Contractors, Inc. VACAB No.
1105, 74-2 BCA  10,854 (1974), and cases cited therein at
footnote 9 at p. 51,630.  Based upon the facts as cited above and
the requirements of the contract, we conclude that the
contracting officer acted properly in terminating the appellant
on Print Order 38, Jacket 772-742, Program 1701-M. 1/

B. Was Termination for Default of Program 1736-S Proper in Light
of Contractor's Refusal to Complete and Deliver Print Order #12

The appellant claims entitlement of the amount of $2,752
representing the cost of producing the Air Force Recruiter
Magazine (Program 1736-S) for issues produced for the months of
January and March 1979.  This sum was deducted by the Government
from monies due the appellant, under a set-off for excess costs
due under an earlier contract Print Order 38, Jacket 772-742.
Upon the appellant's refusal to perform Print Order 12, Program
1736-S was terminated for default pursuant to Article 18,
Contract Terms #1 and the balance of the print orders on the
program reprocured against the contractor's account.  The
appellant contended that the Government breached the contract by
not paying for three shipments.  The appellant has not denied or
disputed that it failed to perform Print Order #12.  Under the
circumstances of this case, the contracting officer was merely
performing an administrative function authorized by the contract,
to wit, terminating the contract for default.  Generally, the
Government has the right to a claim it has against the contractor
through the withholding of funds that are otherwise payable to
the contractor.  In this instance, the amount of money due the
Government because of the contractor's default on the previous
contract under Program 1701-M could properly be withheld from a
payment owed the contractor on a later contract under Program
1736-S, because the Government has the same right which belongs
to every creditor to apply the unappropriated monies of his
debtor in his hands in extinguishment of the debts due him.
Filtron Company, Inc. DCAB, 70-1 BCA, 8086 (1970).

1/ The Board was supplied a copy of the pamphlet produced by the
Appellant and a copy produced by the reprocurement contractor.
Assuming, without deciding, that these books are representative
of the work that was produced by both of these printers, we
observe that the quality of the procurement contractors product
is clearly superior to that of the appellant.

We find that the appellant is refusing to perform Print Order 12,
abandoned his responsibility under the contract.  We further find
that the contracting officer was empowered to ascertain the
appellant's legal responsibility to the Government through the
application of the default clause and excess costs, if any, as a
result of the ensuing reprocurement process.

V. DECISION

Upon our review of the written record, based on our findings of
fact and for the reasons stated above, we accordingly as to:

1. Program 1701-M, Jacket 772-742, Print Order 38, deny the
appeal from the termination for default.

2. Program 1736-S, Print Orders 12, 13, 14, deny the appeal from
the termination for default.